Critical review of literature on enterprise risk management and the cost of capital: The value creation perspective

Purpose The purpose of this paper is to discuss the outlook for risk management and enterprise risk management (ERM) within the hospitality sector including how ERM is being balanced with the need to innovate, and what boards of directors are doing to become more engaged in risk oversight. The implementation of ERM is about taking a strategic view of risk and linking it to business goals and value creation. Design/methodology/approach An interviewer-administered survey was used to collect data from 33 senior risk professionals and other industry experts who had a clear understanding of both risk management and ERM. A structured and semi-structured questionnaire consisting of three sections was personally administered to 33 respondents in 2018 to collect information from risk professionals and other industry experts. Findings It is important to create a culture of risk awareness and to incorporate risk planning into business decisions. The complexity of modern business necessitates that managers in the hospitality sector have greater skill levels than ever before. This research should help hospitality managers to better understand the core risks and link them to strategy. ERM creates an environment where the organization as a whole can support the value creation process with a sharper focus on risk management. Practical implications The growing role of technology along with human connections is shaping the hospitality sector and redefining the travel ecosystem. Future travel experiences are likely to be influenced by a blend of technology and human experiences. Many Indian companies are applying the traditional risk management model in their businesses, while ERM is their future goal. The evolution from a traditional risk management model to ERM is challenging, and so it is important to have an appropriate framework in place for its implementation. Originality/value Hospitality managers need to know how to proactively manage risk management and ERM as the sector is increasingly vulnerable to internal risks. ERM creates a direct linkage between risks and opportunities required for decision-making in a dynamic environment. With growing competition on a global level, the hospitality industry should aim to manage risks strategically to increase the likelihood that organizational objectives can be achieved.

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Review of Literature on Methodological Approaches of Assessing the Adoption of Enterprise Risk Management Practices

Journal of Scientific Research and Reports ◽

10.9734/jsrr/2020/v26i1130332 ◽

2021 ◽

pp. 21-26

Author(s):

S. P. G. M. Abeyrathna ◽

A. J. M. Priyadarshana ◽

U. D. P. Priyashantha

Keyword(s):

Risk Management ◽

Management Practices ◽

Secondary Data ◽

Enterprise Risk Management ◽

Primary Data ◽

Review Of Literature ◽

Dummy Variables ◽

Enterprise Risk ◽

Iso 31000 ◽

Methodological Approaches

This study intends to examine the previous researches on Enterprise Risk Management (ERM). On examining the previous researches, it is evident that both primary data based (using robust models) and secondary data based (using Dummy variables) approaches adopted by the previous researchers and those are taken into account and have been reviewed in this paper. In here, researchers have identified that most of the recent studies have used robust models in assessing the adoption of ERM practices, while earlier researchers used dummy variables in assessing ERM practices. Here, in some cases, there are some contradictories of results of the studies in two approaches. Based on the recommendations, conclusions of prior research, and the analysis of the available literature, it has been recommended to use robust models like COSO ERM framework, ISO 31000 etc. in case of assessing the adoption of ERM practices in future studies.

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Benefits of Enterprise Risk Management: A Systematic Review of Literature

Summer - GATR Journal of Finance and Banking Review ◽

10.35609/jfbr.2021.5.4(3) ◽

2021 ◽

Vol 5 (4) ◽

pp. 28-35

Author(s):

Sankalp Naik ◽

Ch V V S N V Prasad

Keyword(s):

Systematic Review ◽

Risk Management ◽

Firm Value ◽

Jel Classification ◽

Enterprise Risk Management ◽

Academic Disciplines ◽

Review Of Literature ◽

Finance Management ◽

Enterprise Risk ◽

And Performance

Objective: In an enhanced climate of risk complexities, the firm's stakeholders desire a risk management framework that promises the benefits of efficiencies, transparencies, and solutions for interrelated risks. Enterprise risk management (ERM) is widely seen as a suitable instrument to address these issues. However, not all are convinced of ERM's benefits. This necessitates a review of extant literature and collating it to generate interrelated insights. This paper reviews articles on ERM from the management and finance domain and catalogs the benefits of ERM. Methodology/Technique: This paper reviews 129 articles addressing ERM benefits. It examines the academic disciplines of journals publishing ERM studies by looking into their H Indices, SJR scores, and ABDC rankings to assess ERM's impact and acceptability among scholars. The research articles are analyzed for their subject domains, geographic scope, and methodology used in exploring the relationship between ERM adoption and its benefits to the firm. Collating and reviewing these articles enables the mitigation of data gaps. These studies were primarily from accounting, finance, management, corporate governance, and strategy domains. Findings: Improved cost-effectiveness, earnings stability, increased profitability, improved decision making, better risk communication, competitive advantage, better resource allocation, enhanced firm value, and performance are the key benefits of ERM adoption identified in this study. A knowledge gap is presented around assessing ERM benefits and extending ERM research scope to developing countries like India. Novelty: The study catalogs the benefits of ERM and makes a strong case for ERM adoption among firms. Type of Paper: Review JEL Classification: M10, M14, G30, G32 Keywords: Enterprise risk management (ERM); firm value; firm performance; ERM benefits; Covid19 Reference to this paper should be made as follows: Naik, S; Prasad, Ch.V.V.S.N.V. (2021). Benefits of Enterprise Risk Management: A Systematic Review of Literature, Journal of Finance and Banking Review, 5 (4): 28 – 35. https://doi.org/10.35609/jfbr.2021.5.4(3)

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Analisis Manfaat Ekonomi dan Identifikasi Risiko Investasi Sistem Treasury Dealing Room (TDR): Studi Kasus Direktorat Jenderal Perbendaharaan

Indonesian Treasury Review Jurnal Perbendaharaan Keuangan Negara dan Kebijakan Publik ◽

10.33105/itrev.v3i3.85 ◽

2018 ◽

Vol 3 (3) ◽

pp. 202-218

Author(s):

Bagus Utomo

Keyword(s):

Risk Management ◽

Economic Benefits ◽

Enterprise Risk Management ◽

It Business Value ◽

Integrated Framework ◽

Enterprise Risk ◽

Directorate General ◽

Potential Risks ◽

The Cost ◽

Total Project

Minister of Finance has authority to manage state finances covering cash and securities. To increase Non-Tax State Revenue and reduce the cost of funding, the Directorate General of Treasury build Treasury Dealing Room (TDR). The Budget for information system/information technology (IS/IT) is 74% of the total project budget. This study aims to analyze economic benefits of TDR system investment. Generic IS/IT business value table is used to identify the benefits for the organization and digital prosperity framework for the country. Systems dynamics is used to analyze the interrelationship between business benefits to obtain key business benefits. Quantification is based on IT metrics and assumptions on calculating the value of TDR funds. This research also identifies risks using COSO Enterprise Risk Management-Integrated Framework. Thematic analysis is used to process qualitative data. The results show that investment of TDR systems can reduce the cost of money (RCO-09), increasing revenue caused by increasing business capacity (IRE-01) and widening market segment (IRE-04). The total value of benefits for five years amounted to Rp655.294.873.957. The benefits for the country are increasing efficiency and a larger and more efficient market. Eleven potential risks covering regulatory, coordination, technology, and human resources aspects are obtained. Menteri Keuangan bertugas mengelola keuangan negara yang mencakup kas dan surat berharga. Untuk meningkatkan Penerimaan Negara Bukan Pajak serta mengurangi biaya menghimpun dana, Direktorat Jenderal Perbendaharaan berinisiatif membangun Treasury Dealing Room (TDR). Anggaran investasi sistem informasi/teknologi informasi (SI/TI) mencapai 74% dari total biaya proyek. Penelitian ini bertujuan menganalisis manfaat ekonomi investasi sistem TDR. Metode yang digunakan untuk identifikasi manfaat bisnis bagi organisasi adalah tabel manfaat bisnis SI/TI generik, sedangkan kerangka pikir kesejahteraan digital digunakan untuk identifikasi manfaat bagi negara. Pendekatan system dynamics digunakan untuk menganalisis keterkaitan antar manfaat bisnis sehingga diperoleh manfaat bisnis utama. Kuantifikasi dilakukan berdasarkan metrik TI dan asumsi-asumsi perhitungan nilai dana TDR. Penelitian ini juga melakukan identifikasi risiko menggunakan COSO Enterprise Risk Management-Integrated Framework. Analisis tematik digunakan untuk mengolah data yang bersumber dari wawancara, diskusi, dan studi dokumen. Hasil penelitian menunjukkan bahwa investasi sistem TDR mampu mengurangi biaya uang/bunga pinjaman (RCO-09), meningkatkan pendapatan yang disebabkan oleh meningkatnya kapasitas bisnis (IRE-01) dan segmentasi pasar (IRE-04). Total nilai manfaat ekonomi selama lima tahun sebesar Rp655.294.873.957. Manfaat investasi sistem TDR bagi negara yaitu meningkatkan efisiensi dan pasar yang lebih luas dan efisien. Berdasarkan identifikasi risiko, diperoleh sebelas potensi risiko yang mencakup aspek peraturan, koordinasi, teknologi, dan Sumber Daya Manusia.

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Financial Enterprise Risk Management

10.1017/cbo9780511844133 ◽

2009 ◽

Cited By ~ 17

Author(s):

Paul Sweeting

Keyword(s):

Risk Management ◽

Enterprise Risk Management ◽

Enterprise Risk

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Effect of Enterprise Risk Management on Firm Value: Empirical Evidence from Non-Financial Firms in Pakistan

GIS Business ◽

10.26643/gis.v13i2.3298 ◽

1970 ◽

Vol 13 (2) ◽

pp. 15-28

Author(s):

Nouman Nasir

Keyword(s):

Risk Management ◽

Firm Value ◽

Positive Impact ◽

Stock Exchange ◽

Enterprise Risk Management ◽

Least Square ◽

Return On Equity ◽

Financial Firms ◽

Enterprise Risk ◽

Ordinary Least Square Regression

This research examines the effect of enterprise risk management on firm value in Pakistan. Further, this study empirically examines company characteristics that establish the execution of an enterprise risk management system. Using a sample of final dataset of 83 non-financial firms located in Pakistan. The sample included non-financial firms from the year 1999 to 2015 and so up to seventeen observation years per company. As in context of Pakistan, most of the organizations are already implement an ERM programs and establish specialized ERM departments because the ERM is now a global term and has become increasingly relevant because of the growing difficulty of risk and an additional development of regulatory frame works. For the empirical evidences, data collected from non-financial firms listed at the Pakistan Stock Exchange (PSX). Results of logistic regression shows that Capital Opacity, Profitability, Financial Leverage, Firm Size and Slack have positive impact on the implementation of an ERM system but Industrial diversification, Industry and Return on Equity are negatively related to an ERM engagement. The results of ordinary least square regression finds positive relationship between use of an ERM and firm value.

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MODELLING AND CONTROLLING THE ENTERPRISE RISKS COMPLEX ASSESSMENT SYSTEMON THE BASIS OF RUSSIAN STATE STANDARD ISO 9001-2015 CONCERNING RISK-ORIENTED THINKING. GENERAL PROBLEMS AND WAYS OF SOLVING THEM

Automation and modeling in design and management of ◽

10.30987/2658-6436-2020-2-33-41 ◽

2020 ◽

Vol 2020 (2) ◽

pp. 33-41

Author(s):

Irina Merzlyakova ◽

Aleksandr Feofanov

Keyword(s):

Risk Assessment ◽

Risk Management ◽

State Standard ◽

Control Model ◽

Enterprise Risk Management ◽

Iso 9001 ◽

Management Procedure ◽

Russian State Standard ◽

Russian State ◽

Enterprise Risk

The article considers general problems of implementing the enterprise risk management procedure. One of the ways to solve the problems arising when meeting Russian state standard ISO 9001-2015 requirements concerning risk-oriented thinking is presented. A risk assessment control model aimed at coordinating all kinds of the enterprise departments activities, forming a clear algorithm of risk management procedure implementation and attracting a greater number of employees towards this activity is offered.

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